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CYB - thanks - agree your 5 + 1 points. Naira represents a Challenge & opportunities indeed!
TIL - thanks for all your interesting posts over last 14 days or so - pls keep sleuthing and sharing, it’s all much appreciated!
On your recent response to CYB: I agree and suspect we get a ‘kitchen sink’ update prior to the next deadline including an 2023 Operational Update, as well as guidance to your point on Q1 24. I’m guessing they’re waiting to send this pending developments…
I’d expect no news on the ICC Arbitration Award(s) within this kitchen sink update until publication of the Award(s) which on average for these cases, by my research & my personal guesstimate would be Mar-June 2025 - although this case of *direct* expropriation AND the new ICC rules allow for virtual meetings to take place could mean (a) the case is very straightforward so should be very simple and with limited contentions, and (b) is heard (by zoom) & therefore published sooner. Damages also should be straightforward to calculate. Successful enforcement and a special dividend of 1-2x Market Cap to follow (I hope) within 6 months thereafter. Chairman & CEO are aligned with shareholders on this special divi approach, I would think!
Back on the update: I suspect that the SS AD plus these updates are already drafted and ready to go - just awaiting close out of the SS workstreams.
I’m also rather hoping for a Gabon SPA RNS to follow(?) .
TIL your helpful posts on this lead me to believe there are solid reasons for all the potential protagonists (Carlyle, Gabon, Vitol & Savannah) to explore & potentially progress this deal.
Sequentially, Gabon following Op update and SS AD would seem the ‘right ‘ order, to avoid dual Suspension regulatory discussions(?), but with the onshore and offshore key protagonists on the Gabon deal being highly motivated, coupled with perhaps a less complex single deal (vs many for SS), it may be we hear on Gabon first.
Here’s hoping either way on this sunny Friday, with my rather ‘rose coloured’ sunglasses that we hear positive news end Feb/early March!
It would be awesome to have deep sources of $ cash from outside of Nigeria that could swiftly repay the Nigerian $ loan, so we can crack on with other Nigerian investments using Nigerian revenues to fund same. I know the company policy is to keep every country P&L separate but Domestic Nigerian $ loan is an albatross around SAVEs neck even with the structure of the GSAs. Places a lot of pressure on domestic buyers & save’s GSA contracts. Credit insurance is mitigant but pressure can make for uncomfortable outcomes in EM.
And of course the SS (and Gabon?) $ in due course could be used to develop Niger for an optimized / rich farm out.
DYOR & all the best all !
Morning folks, Another week down.......................................................... Silence on the savannnah front.........
2 new jobs posted yesterday
https://careers.savannah-energy.com/job/Eket-Senior-Mechanic-AK/967827255/
https://careers.savannah-energy.com/job/Calabar-Field-Operator-CR/969237355/
Caution - I must say I am surprised that we haven't had an update on Nigeria at the very least, guess we will have to all wait till Q1 2024 update in April.
Good morning, everyone.
I suspect there're five obvious impacts for Savannah here:
1. Our NGN cash pile is fast becoming monopoly money and we can expect another fx accounting hit in the financials.
2. The fabled debt restructuring will only occur once the Nigerian banks are fully confident that the devaluation process has reached an end. They'll be directed by Abuja on this.
3. We will receive significantly more NGN for our contracted TOP USD receivables going forward, but this may mostly be based on the existing (and now apparently highly sage) credit guarantees being triggered. This looks very good for Savannah.
4. Adding new customers will be tough and absolutely must be credit-enhanced.
5. Other Nigerian domestic acquisition opportunities may arise as existing operators decide to leave or find themselves in distress.
https://twitter.com/JavierBlas/status/1758025761611559345
By the way "The World For Sale" by Javier Blas and Jack Farchy is a corking read.
On a separate note Jadestone is suspended this morning pending a RTO deal in Australia, just goes to show there are deals to be made outside of Africa as well if Savannah ever wanted to pivot away from a deal outside of Africa..........
https://www.lse.co.uk/rns/JSE/response-to-media-speculation-trading-suspension-4qylrkr01mycypj.html
Thanks for all the informative posts TiL :-)
If the borders between Niger and Benin re-open in the next few weeks as the article below illudes too, I would want Savannah to be quick to start a work programme in Niger for Q2 2024.
https://cadreco.media/article/848/reouverture-prochaine-des-frontieres-beninniger-lideal-pour-leconomie-nationale
In response to the coup d'état that occurred in Niger on July 26, 2023, Benin closed its border with its neighbor, in accordance with sanctions measures taken by the Economic Community of West African States (ECOWAS). Niger also subsequently closed its border with Benin.
But the disadvantages of the application of ECOWAS sanctions against Niger have not spared Benin. Serious economic consequences have been recorded. Port revenues have fallen considerably. Beninese transport traders have seen their income-generating activities suspended. There was gnashing of teeth among the truckers. The president of the union of transporters and importers of Benin, Rabiou Garba, deplored the fact that more than 500 trucks were blocked in a park with a capacity of 200 trucks in Malanville, a Beninese town on the border with Niger. Which makes this park inaccessible to other trucks arriving there. “So backordered goods. Billions of CFA francs are at stake,” he complained.
Five months after the ECOWAS sanctions applied against Niger, Benin lifted the suspension of imports of goods transiting to Niger. This news came a few days after the President of the Republic expressed his desire to “rapidly restore relations” between the two neighboring countries. But Nigerien leaders remained adamant for a return to better feelings between Benin and their country.
However, faced with the enormous repercussions of this situation on the Beninese economy, the President of the Republic of Benin, Patrice Talon still plans to restore the good atmosphere, particularly economic, which linked the two countries. Thus, during the press conference on Thursday, February 8, Patrice Talon gave assurances regarding the very soon opening of the borders between Benin and Niger. “If all goes well, by next week or in the weeks to come, the borders between the two states will be open for the happiness of nationals of the two countries,” he said. This measure would be ideal for the national economy, by revitalizing the revenues of the Autonomous Port of Cotonou and promoting the resumption of suspended activities. The people of Niger will also be able to breathe a sigh of relief. Because the disadvantages are also visible in this Sahelian country.
UK government announcement - https://www.gov.uk/government/news/uk-signs-landmark-economic-partnership-with-nigeria
Full Article - I hope it's a Vitol / Savannah Due even though the article does not mention Savannah.................... Surely Vitol would like a credible partner to operate these assets are they really willing to risk providing a loan of such magnitude without a credible operator also working alongside the Gabonese government remains to be seen but either way I believe the deadline is end of Feb.
Vitol wants debt paid before helping GOC buy Carlyle's assets
Published on 12.02.2024 at 05:40 GMT
Geneva-based trader Vitol remains the Gabonese government's preferred choice for a loan of several hundred million dollars needed for the Gabon Oil Co (GOC) to buy Carlyle's assets, which have been operated since 2017 by Assala Energy.
Vitol will however only lend the money if the Société Gabonaise de Raffinage (Sogara) pays off its debt of several million dollars for past deliveries of petroleum products. Gabon's oil ministry, headed by Marcel Abéké, has so far refused to link the two cases.
Carlyle is putting pressure on the GOC to find the funding as quickly as possible. Oil company Maurel & Prom signed a purchase agreement with Carlyle in August 2023, a few days before Brice Clotaire Oligui Nguema's coup. He has since decided to pre-empt these assets through the state company, which is active via direct stakes in all of Carlyle's blocks. The deal represents almost 45,000 bpd of production.
Would be nice if Savannah was able to get in as operators or have some role to play
Looks like Vitol is ready to provide a conditional loan although looks like Savannah isn’t mentioned this time so may be they are happy for the Gabon oil company to be operators without a third party
https://www.africaintelligence.com/central-africa/2024/02/12/vitol-wants-debt-paid-before-helping-goc-buy-carlyle-s-assets,110158233-bre
On a separate note may the year of the dragon be with savannah energy plc and Andrew Knott. Hoping everyone prosperity and good fortune
Mukesh and Komakino - with every extension I have always felt that the intention is to return to market with a deal I am sure in the back of AK mind you don’t want to have wasted 14 months in suspension to not come back with a deal and than ask for another suspension to pursue deal making strategy will be hard sell to shareholders so the idea being come to market with a deal following the current suspension period would be the most prudent and sensible course of action now whether that’s with South Sudan or another deal or South Sudan and another deal who knows. Now since December 22 it’s only recently after over a year we have started to get a little more commentary on the deal itself:
1) first time since suspension savannah added a little context to the rns on 1st Feb 24 - saying in country approvals are being pursued this can be viewed in many ways it could mean from Savannah point of view they are reaching a stage where they have completed all they need to and have satisfactory lined up t
Workstreams in order to complete that to me is how I read it effectively they are now saying the ball is in SS government hand but savannah has got everything ready to go if approval is granted.
2) Shore capital - saying realistically expect admission document in the new suspension window.
3) Africa intelligence saying on 30th Jan article due to complete in the next few weeks.
4) the IC interview loosely touching on completion shortly.
Now that’s the most drip feed or breadcrumbs we have had since deal announcement which has been over a year in the last few weeks.
Folks can view the above with caution or optimism……. ……………….
AK said the plan was for another acquisition in 2023. Assuming that SS is the reason for the delay in announcing this, it's more than reasonable to assume it would have have an effective date of early 2023 at the least. So there is definitely the possibility in my mind that we could announce the SS deal quickly followed by an SPA for another acquistion.
The sun is shining so feeling optimistic this morning :-)
Just food for thought!
I bet AK is also negotiating another deal,in the background for 2 reasons, if the S.S deal falls through, I would imagine this next asset as a back up will be in a better country in Africa. So backup required in case the deal don`t go through.
Also just imagine if the S.S deal goes through, and we start trading with a much bigger market cap and everything is in place we could annouce the other deal and no need for suspension as it should not be bigger than our current Mcap after S.S.
Assuming this is the outcome, and S.S completes sometime this year we could be picking up another asset shortly after and if this was being discussed in 2023 there could and should be an affective date from beggining of Jan 2023 or July 2023.
Yes you are all correct I have my Rose Tinted Glasses on! it`s the weekend :)
Fascinating, thank you TIL. It’s really intriguing from a SAVE perspective! As perhaps one of the second hydrocarbon deals contemplated by the company and referred to last year, I would guess it could be well worth exploring. Economics need to be right of course and one would imagine the financing by way of a PXF etc would have to involve a 3rd party trader (such as has been previously postulated in articles). Which might mean some greater sharing of the economics. We’ll see.
I am hoping SS financing would by now just be required to be a short term - say 12 month - PXF. Which I would hope would be provided by the vendor, to ensure low cost for SAVE & with the financier having solid knowledge of asset & hence relatively sympathetic on terms. With built in grace periods etc. we’ll see.
Just re-reading the RNSs and the evolution in wording of each RNS on the extensions particularly since June last year on SS - to me the wording slight changes in vocabulary gives the potential hint that we might expect a formal notification either way sooner than the deadline - ie either extension or Admission Doc - end Feb or March. We’ll see - maybe I’m reading too much in!
Https://www.energyvoice.com/oilandgas/africa/547530/exxon-mobil-to-exit-equatorial-guinea-after-nearly-three-decades/
We know that Equatorial Guinea is still looking for a partner to continue running the fields so probably even though exxon is handing over to them they don't have the operatorship experience or capability to run assets
https://www.africaintelligence.com/central-africa/2024/02/08/teodorin-obiang-offers-zafiro-and-fortuna-fields-to-eni,110157308-bre
Seems like buyers already in place for total energies
https://www.upstreamonline.com/production/totalenergies-heading-for-the-door-pouyanne-says-niger-delta-oil-exit-deal-soon-/2-1-1595568
Https://www.union.sonapresse.com/gabon-economie/rachat-des-actifs-dassala-gabon-la-goc-fait-valoir-sa-preemption-27227
ONE month and a half after the instructions of the President of the Republic, Brice Clotaire Oligui Nguema, concerning the
purchase of Assala assets, Gabon confirms having received several offers from large companies and reassures public opinion
of its ability to raise funds as part of this operation. Indeed, while rumors were circulating relating to
an alleged inability of the State to raise the funds necessary to exercise pre-emption for the repurchase of Assala,
as announced by the Head of State in his speech to the Nation, the Director General of Hydrocarbons, Ernest
Ndong Nguema, brushed aside this information.
"I would like to remind you that the pre-emption process as defined in the law, that is to say the Code of
hydrocarbons, provides that in the event of transfer or assignment of rights, the State has 60 days to make
pre-emption. In the event that the State does not exercise its right of pre-emption, the national operator (GOC) has at its discretion
45-day turn to pre-empt. The GOC exercised this right of pre-emption on November 25, 2023, therefore before
the expiration of the deadline which was December 3, 2023. This was the only deadline that had to be respected,” he declared.
And to continue: “The sellers and the GOC are now engaged in a negotiation which should lead to the
signature of a new deed of transfer, which defines the deadlines for the payment and effective transfer of the asset.
Concerning the State's capacity to raise the funds to make this acquisition a reality, I would again like to reassure
public opinion. Several opportunities and financing mechanisms are available to us. Our attention is focused
therefore on the assurance that we select the best option from the point of view of the interests of the State ".
Total looking to exit Nigeria onshore as well, same operating assets as shell sale of 30% stake for $2.4bn to local independents announced weeks ago. Total has 10% stake in these assests so simple maths would suggest Total stake is worth circa $800 million. I wonder whether we would be interested in these.............................
https://www.reuters.com/business/energy/totalenergies-looks-exit-nigerian-onshore-oil-following-shell-2024-02-08/
Listened to that again as wasn’t really concentrating the first time, I’ve never been very good at multi-tasking ha ha ha
On a serious note:-
Why did they chat about SAVE first with all the other companies they could have discussed?
He kept on so strongly about companies paying dividends but we don’t pay one (YEY)!
He seemed super-certain that we would be paying a divi in the next year or so!
He said up front on the interview he expected the deal to close in the next few weeks!
PM are our 4th largest II with 92m shares (7%) and will be far more up to speed than us.
All in all, the fact that AIM have allowed a further 2 months extension (after the very tight 5 week extension including the Christmas break) along with the points above make me feel a bit more confident about the SS deal completing. FWIW I now think we have a better than average chance of success here. That said, it’s all down to in-country approvals IMO. If we can get those sign offs, I definitely believe AK will deliver on the rest of the stuff including finance - i f we end up needing to borrow any.
Not getting too excited yet though and even if we complete, we still have the risk of the war in Sudan going on along the export pipeline route.
GLA and I genuinely wish all the best of luck, especially those of us who originally bought in when we only held 2 PSC’s in Niger. How things have changes since IPO back in 2014. And thinking about it, it’s amazing that we have not yet drilled on of our own wells and sold a single barrel of oil!!!
We know we have to get another RNS by 2/4/24 (7 weeks on Tuesday) at the latest but how many, and on what subjects will we receive before then? Who knows we may even see the AD and admission before April…
Thankyou for posting the Gervais Williams IC podcast were he explains the pros and cons.